Severance Negotiation

R

refi

Recycles dryer sheets
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Jul 26, 2017
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I received my final paperwork for severance, overall it's pretty good - they gave me three months of transition time (already completed), now I'm entitled three months of severance, 2023 bonus, and a portion of my RSUs. I have to sign paperwork to invoke the remaining payouts and bonuses.

Yesterday, I had a greedy thought reviewing the docs, should I ask for more? I initially asked for the transition time and they granted it. Was thinking, can I ask for more (e.g. - the rest of my RSUs? A longer severance period?). The current payouts are based off the standard HR separation documentation.

Should I just sign it or ask for more? Thanks in Advance!
 
Perhaps a small additional request, made lightly. Any chance they could pull part of the offer?
 
Hard to know with so little information on the employer/employer relationship and the facts and circumstances that caused the separation.

If it is part of a larger payoff I suspect they would not be inclined to deviate from the standard package in terms of the severance benefits. It could be that they could be flexible on the timing but not on the benefits and that is why they granted you more transition time.

Do you know what other similarly situated employees have received and if it has been any different from what they are offering to you?
 
I would ask for the remainder of the RSUs that they aren't proposing to give you. Tell them that you've had some time to reflect and you realize how hard you've worked, you believed in the company, and believe you've earned them. They shouldn't give much pushback on it because it doesn't really cost them anything. I'd guess there's a higher likelihood they give in on that than not.

As far as other items - what kind of leverage do you have? Keep in mind the At Will work relationship. Should you not agree to the severance agreement, they could terminate you without giving anything.

So, you know that they want you out, you are no longer welcome as an employee. If you refuse the severance, they may view it that you're saving them money and will simply terminate you. Remember, At Will means they can terminate you for any reason or no reason at all.
 
IMO, this would be worth a consult with an employment lawyer - often they will do an initial consult free of charge, but at worst, you pay for an hour or two and get some serious, actionable advice. Assuming you are a member of a "protected class" given you are "retirement" age, they will be EXTREMELY HESITANT to pull their offer and "simply terminate you" as njhowie suggests. I've been a mega-corp people manager now for over 25 years - and I can tell you that short of you simply resigning, they would really like to have your signature on those papers (the ones where you waive all your rights to any future claims or actions).

[Adding, they will be most flexible on the options that require the lowest level of approvals.]
 
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Nothing you could negotiate is going to change your life. Shake hands and get going on your new life.
 
I have changed some of the wording once. The original document said that the I could not be hired any of the Megacorp's companies. I had it changed to they are not required to hire me. This change ended up being a possibly big benefit. I did consult work for one of them and was on the way toward being hired for about a year. Then things changed and I went elsewhere.

Unless you are a top-floor executive, I would expect that you stand little chance to change anything relating to money unless they are violating some previously written agreement. No harm in trying though.
 
CRLLS said:
I have changed some of the wording once. The original document said that the I could not be hired any of the Megacorp's companies. I had it changed to they are not required to hire me. This change ended up being a possibly big benefit. I did consult work for one of them and was on the way toward being hired for about a year. Then things changed and I went elsewhere.

Unless you are a top-floor executive, I would expect that you stand little chance to change anything relating to money unless they are violating some previously written agreement. No harm in trying though.
Click to expand...

The no-hire clause is often a way around issues related to things like pension service requirements. My company simply "re-hired" me through an third party.

Agree, the time to negotiate "severance" is early -- ideally before you even accept a job. I had a number of hooks on my ex-pat agreement that were oriented in that direction.
 
You have to give to get. Is there anything you want less in order to get more of something else you value?
 
refi said:
... Yesterday, I had a greedy thought reviewing the docs, should I ask for more? I initially asked for the transition time and they granted it. Was thinking, can I ask for more (e.g. - the rest of my RSUs? A longer severance period?). The current payouts are based off the standard HR separation documentation.

Should I just sign it or ask for more? Thanks in Advance!
Click to expand...

It sounds like this is a fairly large publicly traded corporation with a professional HR group, not the owner's wife who does the accounting and HR to help out? Assuming it's the former, you can ask for anything you want without risking your severance offer, but they probably can't or won't do much more than they've already offered.

Employee stock plans, 401ks, pension plans, etc have governing documents that are filed with the agencies like the IRS or SEC and the company can't violate the plan terms or treat one participant differently from the others. I would think the RSU payout falls in this area. There's likely something in the plan doc that says what happens in the event of involuntary separation (e.g. x% of shares due in the following year receive accelerated vesting) and that's what you've been offered. Anything more is going to be impossible without violating some law or regulation. You can ask, but be prepared to take no for an answer.

If the company has a formal plan for severance pay that's based on something like title or years of service, that's also going to be difficult to adjust. Deviating from the standard for one person can look like discrimination against another person.

What can change is the stuff that's discretionary and not part of any existing documented requirements -- maybe they can keep you working for another month and not start the severance period or pay out any lump sums until the new year; they might be able to let you keep a laptop, cell phone, equipment provided for a home office; if you're looking for a new job, you might be able to get career coaching services.
 
Is the separation due to layoff or are you retiring?
Do you "need" more in order to be able to retire?
Can you file for unemployment in January?

It doesn't hurt to ask for more, but I always say, leave on a good note if you can.
 
cathy63 said:
It sounds like this is a fairly large publicly traded corporation with a professional HR group, not the owner's wife who does the accounting and HR to help out? Assuming it's the former, you can ask for anything you want without risking your severance offer, but they probably can't or won't do much more than they've already offered.
Click to expand...

Exactly my thoughts. My MC had a published severance schedule that was shared on our internal site, which made things very easy. It was generous, but non-negotiable as far as I knew. Either way, I was very happy when I got it, and didn't even think to ask for more.

Forward!
 
CRLLS said:
I have changed some of the wording once. The original document said that the I could not be hired any of the Megacorp's companies. I had it changed to they are not required to hire me. This change ended up being a possibly big benefit. I did consult work for one of them and was on the way toward being hired for about a year. Then things changed and I went elsewhere.

Unless you are a top-floor executive, I would expect that you stand little chance to change anything relating to money unless they are violating some previously written agreement. No harm in trying though.
Click to expand...

When I retired in 2009 my megacorp first had wording that I could not be hired by my client. (I think for a period of time but I can't remember how long). I was on a sales team, but essentially responsible for the technology aspects of the relationship. Then I pointed out in my not-so-subtle way that I thought that was "pretty ..... foolish" as I knew our products and in what way would me working for the client be a bad thing in terms of possible sales. They then removed that wording.

Fast forward about six months and my mega-corp and my main client were negotiating a decent sized deal ($4 million range), and they couldn't close on the deal because the client kept rejecting mega-corps I/T architects. When asked what would it take to close the deal, the client said "copyright". That's when mega-corp called me and asked me to hire on to a 3rd party to work on the contract. I did, but on my terms: part time, only one trip per month to the client (for a week at a time). While on the contract, my old client did try to hire me but I respectfully turned down the job as it would have meant moving and more importantly working full time in the rat race.

I then moved on to teaching computer science as an adjunct at a local school as a way of keeping myself from doing something foolish (like taking the job). [Side note: I ended up as a full time faculty a few years later, so so much for that plan!]
 
Is there any time sensitivity? Is your company trying to get you and others off the books by year end? If so, you probably don't have the time for any negotiation beyond maybe a simple thing. Like asking for all RSUs, or that you can file for unemployment without them contesting it. Otherwise, as suggested, be happy you already had 3 months additional time, and have 3 months severance pay. You are getting out with a smile on your face, many of your co-workers are probably going out with a sad face.
 
Thanks for the feedback, all!


cathy63 said:
It sounds like this is a fairly large publicly traded corporation with a professional HR group, not the owner's wife who does the accounting and HR to help out? Assuming it's the former, you can ask for anything you want without risking your severance offer, but they probably can't or won't do much more than they've already offered.

Employee stock plans, 401ks, pension plans, etc have governing documents that are filed with the agencies like the IRS or SEC and the company can't violate the plan terms or treat one participant differently from the others. I would think the RSU payout falls in this area. There's likely something in the plan doc that says what happens in the event of involuntary separation (e.g. x% of shares due in the following year receive accelerated vesting) and that's what you've been offered. Anything more is going to be impossible without violating some law or regulation. You can ask, but be prepared to take no for an answer.

If the company has a formal plan for severance pay that's based on something like title or years of service, that's also going to be difficult to adjust. Deviating from the standard for one person can look like discrimination against another person.

What can change is the stuff that's discretionary and not part of any existing documented requirements -- maybe they can keep you working for another month and not start the severance period or pay out any lump sums until the new year; they might be able to let you keep a laptop, cell phone, equipment provided for a home office; if you're looking for a new job, you might be able to get career coaching services.
Click to expand...

So this captures things best. MegaCorp was trying to cut costs and I saw it was an opportunity to raise my hand and go into FIRE with a payout. I don't have huge leverage as I built out my team up with a succession plan and replacements, it's been running fine for the three months w/o me with some limited intervention. I'm 44, so that's the best I could do for a protected elder class, but otherwise not so much. I think they want to get me off the books, but being a huge MegaCorp, I'm a minuscule drop in the bucket.

I've already asked for the equipment which they've granted and also they've provided me with executive transition coaching which I googled to be about 15k (I'm not sure I'll even use). As another note, the extra three months they gave me enabled me to get the first portion of my RSU vest in 2024.


So again, what they have offered is fairly generous - I think i'm leaning towards, shooting a quick note to see if any possibility to accelerate RSUs or just sign. As some have said, will anything I negotiate change my life, the answer is NO - just giving me a bit of anxiety at this point. I did reach out to a couple employment lawyers and they said there is not enough meat on the bones for their time.
 
IIRC you had 2 options, the second one being to work till next year for RSU vesting and you chose option 1 and got out early.
If you want to renegoiate the agreed upon offer, perhaps they may want to make changes to benefit them as well.
Good luck with that.
 
refi said:
... I've already asked for the equipment which they've granted and also they've provided me with executive transition coaching which I googled to be about 15k (I'm not sure I'll even use). As another note, the extra three months they gave me enabled me to get the first portion of my RSU vest in 2024.

So again, what they have offered is fairly generous - I think i'm leaning towards, shooting a quick note to see if any possibility to accelerate RSUs or just sign...
Click to expand...

It sounds like you'd already thought of all the negotiable items I could come up with.

You can try for the additional RSUs too, but you might want to google "company name RSU SEC" and read the provisions of your plan first. Your megacorp is going to follow the plan they filed with the SEC as rigorously as possible, so if you can find some clause that works in your favor and point to it when you ask the question, you might get a better result.
 
refi said:
Thanks for the feedback, all!




So this captures things best. MegaCorp was trying to cut costs and I saw it was an opportunity to raise my hand and go into FIRE with a payout. I don't have huge leverage as I built out my team up with a succession plan and replacements, it's been running fine for the three months w/o me with some limited intervention. I'm 44, so that's the best I could do for a protected elder class, but otherwise not so much. I think they want to get me off the books, but being a huge MegaCorp, I'm a minuscule drop in the bucket.

I've already asked for the equipment which they've granted and also they've provided me with executive transition coaching which I googled to be about 15k (I'm not sure I'll even use). As another note, the extra three months they gave me enabled me to get the first portion of my RSU vest in 2024.


So again, what they have offered is fairly generous - I think i'm leaning towards, shooting a quick note to see if any possibility to accelerate RSUs or just sign. As some have said, will anything I negotiate change my life, the answer is NO - just giving me a bit of anxiety at this point. I did reach out to a couple employment lawyers and they said there is not enough meat on the bones for their time.
Click to expand...

I didn't realize you were that young (44). Assuming you are not yet retiring and your career network will be valuable to you in the future, would say that if there isn't much left to be gained, drop it. If you were heading into FIRE and never planned to run into any of the management folks again, would be a different perspective. I'm always amazed what a small world it is within professions - never a great idea to burn any bridges that aren't absolutely necessary.
 
Aerides said:
Exactly my thoughts. My MC had a published severance schedule that was shared on our internal site, which made things very easy. It was generous, but non-negotiable as far as I knew. Either way, I was very happy when I got it, and didn't even think to ask for more.

Forward!
Click to expand...
Both the MegaCorp and the large private company I worked for had very clearly defined policies regarding separations, retirement, etc. (along with any other necessary HR policies). All employees got no more, no less. No one was authorized to negotiate outside policy - which is how I'd run a company if it was mine.
 
I would take what they are offering and don't look back.
 
quick follow-up: shot a quick (nice) note to HR to look at opportunities for more severance highlighting my value and contributions and got shut down with a NO in seconds. Anyways, glad I at least asked, still getting a great package going into the sunset. As mentioned, given it's a Megacorp, seems like they had a fairly well defined and documented policy.
 
There are so many variables to this. Jurisdiction, past court awards, company, age, service, position, job market, etc.

I was privy to many sev. agreements where I worked, lived. I delivered a fair number of them.

I engaged a labor lawyer to negotiate my settlement. The final number was a very good improvement over the initial low ball offer from megacorp. The lawyer threw his fee into the agreement at the last minute. As a start, the basis for determining monthly amount was not salary.

There is no right answer. Just a lot of variables that could change based on where you live, etc.

At the very least my recommendation was always to have the separation agreement reviewed by an experienced lawyer.
 
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